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Labor(L) 100 100. (x) pues Concrete Glass 0 Sand (K) 0 0 Labor(L) 100 100

Labor(L) 100 100. (x) pues Concrete Glass 0 Sand (K) 0 0 Labor(L) 100 100

Economics (MindTap Course List)
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter26: Factor Markets: With Emphasis On The Labor Market
Section26.1: Factor Markets
Problem 2ST
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Practice Question #1

The German economy produces two goods: Glass and Concrete. Both goods are produced
using Workers (L) and Sand (K). The graphs below show allocations of labor and capital to the two industries.
Solid Orange curves represent Glass isoquants, while dotted Blue curves represent Concrete isoquants.

A) Sketch the production contract curve for this economy. Explain what this represents in words. (5
Points)
B) Draw an approximation of the production possibilities frontier for this economy. Explain any curvature
or kinks (or lack thereof) (5 Points).

Labor(L) 100 100. (x) pues Concrete Glass 0 Sand (K) 0 0 Labor(L) 100 100
Transcribed Image Text:Labor(L) 100 100. (x) pues Concrete Glass 0 Sand (K) 0 0 Labor(L) 100 100
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